Elon Musk plans to layoff 10% of Tesla workforce due to a “super bad feeling” he has about the economy
The ripple effect of the global economic downturn has spread to the tech sector. Dozens of tech companies have either cut jobs or planning to let their employees go due to the ongoing macro events including inflation and the ongoing war between Russia and Ukraine. However, some tech companies pointed to overhiring during periods of rapid growth as the reason for the recent layoffs.
Yesterday, Gemini, a crypto startup founded by billionaire twins Cameron and Tyler Winklevoss, announced it was laying off 10% of its workforce, making it the first U.S.-based cryptocurrency exchange and custodian company to suffer the crypto slump casualty.
Today, Tesla Elon Musk said he plans to cut 10% of the company’s jobs due to a “super bad feeling” he has about the economy, Reuters reported on Friday, citing Musk’s email to executives titled “pause all hiring worldwide.”
The ‘bad feeling’ Musk has about the economy may have to do with his earlier warnings of an imminent recession. Just this week, Musk tweeted that “recessions serve a vital economic cleansing function,” in response to a tweet from Australian tech billionaire Scott Farquhar, who criticized Musk’s call for staff to return to the office and suggested that Tesla employees should look into remote work positions elsewhere.
The above set of tweets illustrate why recessions serve a vital economic cleansing function
— Elon Musk (@elonmusk) June 2, 2022
Meanwhile, Tesla has not yet commented on the layoff plan, but the email came two days after Musk issued a warning to his employees, saying they should spend a minimum of 40 hours in the office per week or leave the company, as manufacturing is “the most exciting and meaningful products of any company on Earth… will not happen by phoning it in.”
According to its annual SEC filing, Tesla employed around 100,000 people at the end of 2021. That means about 10,000 will be affected by the planned layoff.
Tesla is not alone. There are at least fifty companies that have either laid off their employees or plan to in the near future. Below is a list of 2022 U.S. tech layoffs courtesy of CrunchBase.
|Company (click name for more info)||No. of reported layoffs||% workforce impacted||Announced/reported date||Industry||Source|
|Outside Inc||Unclear||15%||5/20/2022||Media/entertainment||Denver Business Journal|
|Vroom||270||14%||5/16/2022||Auto, E-commerce||Fast Company|
|Latch||30||6%||5/13/2022||Smart Home, Security||TechCrunch|
|Thirty Madison||24||3%||5/13/2022||Health Care||Axios|
|DataRobot||70||7%||5/11/2022||Artificial Intelligence||The Information|
|Reef||750||5%||5/6/2022||Food delivery, ecommerce||The Information|
|On Deck||72||25%||5/5/2022||Business development||TechCrunch|
|Ideoclick||40||33%||5/4/2022||E-commerce||Puget Sound Business Journal|
|Halcyon Health||Unclear||Unclear||4/15/2022||Health Care||Axios|
|Rad Power Bikes||100||14%||4/12/2022||Transporation||GeekWire|
|GoPuff||450||3%||3/31/2022||E-commerce||Bloomberg, The Information|
|Grove Collaborative||Unclear||17%||3/29/2022||E-commerce||Retail Dive|
|Curology||150||20%||3/16/2022||E-commerce||SF Business Times|
|Knock||Unclear||46%||3/15/2022||Proptech||The Real Deal|
|Rhino||57||20%||2/3/2022||PropTech, InsurTech||The Real Deal|
|Glossier||80||33%||1/26/2022||Beauty||Business of Fashion|
|Root Insurance||330||20%||1/21/2022||InsurTech||Columbus Dispatch|